Tourism Industry and Public Enterprises

Subject: Economics

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The business or occupation, which provides different kinds of facilities to the tourism is known as tourism industry. Tourism industries include the whole business activities of providing facilities for tourists like hotel/ lodge, management, travel agents, trekking agents and many more services to tourists.
Tourism Industry and Public Enterprises


The business or occupation, which provides different kinds of facilities to the tourism is known as the tourism industry. Tourism industries include the whole business activities of providing facilities for tourists like hotel, lodge, management, travel agents, trekking agents and many more services to tourists. The contribution of the tourism sector to GDP is 1.8% and it provides employment to around 1,60,000 persons.

Role and Importance of Tourism in Nepal

Nepal is known as a prime destination for tourists due to its natural beauty, unique culture, and cultural heritage. Some of the major contributions of tourism sectors to national economy are as follows:

  1. Source of Foreign Exchange Earnings: Tourism industry is regarded as one of the major sources of foreign exchange earnings. This sector contributes one-seventh of the total foreign currency earnings.

  2. Employment opportunities: Nepal has a serious problem of unemployment, underemployment, and seasonal employment. Tourism helps to generate employment opportunities directly or indirectly to the people in different tourism related activities.

  3. Source of Public as well as private income: An important aspect of the tourism industry is income generation for both public and private sectors. In terms of taxes, fees, visa, government receives a considerable amount of revenue.

  4. Development of handicrafts Industries: The development of handicraft industries also depends on the development of tourism industry. Different types of handicraft such as arts, shawl, woolen carpets, paper and paper products representing Nepalese arts and culture are produced in different parts of the country.

  5. Cultural Exchange: Tourism industry facilitates cultural exchange. As cultural ambassadors, tourist carries over various cultural concepts of other countries where they visit. In this way, the interaction between people of different countries helps to widen their horizon.

  6. Development of Rural Infrastructures: Most of the tourist destination lie in the remote areas of Nepal. Thus, as the tourist enjoy the natural beauty sightseeing and trekking in remote areas, transportation and communication facilities are to be provided.

  7. Publicity of Nation: Nepal is a small country, difficult to be located on the world map. Tourism helps to publicize the country in different parts of the world. It helps to publicize Nepalese art, skills, tradition and hospitality to the world.

  8. Development of human resources: Tourism industry requires more trained and skilled manpower. As tourism industry expands, there is a need to produce a large number of trained and skilled manpower.

Prospects of Tourisms Industry

Some of the major prospects of tourism industry are as follows:

  1. Nature Beauty: Nepal is a country full of natural beauties. It has glittery white mountains, interesting caves, foaming waterfalls, famous lakes and rivers, green and dense forests and rare wild animals.All these can be the major source of the tourist attractions .

  2. Historical and Religious Places: There are many places of historical and religious importance in our country. Nepal is the birthplace of Gautam Buddha, the founder of Buddhism and light of the Asia.Along with this, we have several historical monuments and temples which can be the best source of the tourist attractions.

  3. Ancient art and architecture: Nepal is famous for its arts and architecture. Many tourists visit Nepal to study its ancient art and architecture. Nepali art is basically based on religious themes taken from Buddhism and Hinduism.

  4. Cultural Diversity: Nepal is a multi-ethnic nation with over 60 different ethnic groups living in different parts of the country. It is a common garden of various castes and communities. As each community has its own language, culture, way of living, tourists are highly interested in studying and enjoying their company.

  5. Climate Diversity: In Nepal varieties of pleasant and healthy climates are found in different regions due to its varying topographic altitudes. Therefore, tourists from different countries can choose their own climates.

  6. Rural Simplicity: The life in the developed country is very mechanical and complex. They like to spend their leisure time enjoying village life like ours. In Nepal, the village life of the people is very simple, fair and hospitable.

  7. Less Expensive: The cost of living in Nepal is very low in comparison to other countries. So, it is suitable place for tourist of different countries and different status. They may enjoy and stay for a long duration at very low cost.

  8. White Mountains: Nepal is famous for its snow-capped mountains. Out of 14 world peaks above 8,000m high are located in Nepal. The world's highest mountain peak Mt. Everest and numerous other peaks such as Annapurna, Dhaulagiri, Machhapuchhre, Ganesh Himal offer an immense attraction to tourists.

Problems of Tourism Industry


Though tourism industry has a very high potential, it has not contributed as desired to the economic development of Nepal because of the following problems associated with it.

  1. Lack of Transportation and Communication facilities: Due to inadequate development in transportation and communication facilities in most of the potential tourist destinations, the development of tourism sector is hindered.

  2. Lack of trained tourism manpower: Trained manpower related to different sectors of tourism such as guides, entrepreneurs is essential to provide quality services to tourists but due to the limited training facilities tourism manpower in Nepal is neither well trained nor adequate in numbers.

  3. Inadequate information and publicity: Adequate information and publicity related to tourism can play a very important role in the development of tourism industry. But in case of Nepal, an attractive tourist destination has not been well publicized in foreign countries.

  4. Lack of Recreational facilities: More than 34 percent of the tourist who visit Nepal come for pleasure motives. But recreational arrangements for such tourists are very inadequate. The recreational means like rafting, boating, skiing, shooting are very limited.

  5. Lack of Good Quality Hotels: Except a few five-star hotel there is a lack of good quality hotels with modern facilities at tourist spot for accommodation. Even the available hotels are centered in major towns and cities like Kathmandu and Pokhara.

  6. Pollution: Major towns and cities of Nepal, nowadays, have begun to suffer from environment pollution. Lack of proper solid waste management, air pollution, sound pollution and water pollution in major urban centers has become a great challenge in the development of tourism industry.

  7. Insecurities: Recently, the development of tourism industry is heavily affected by growing insecurities due to insurgency activities. Political disturbances and strikes are also responsible for creating insecurity and unreliable situation to tourists.

  8. Backward Tourism Sites: The most important tourism sites from the viewpoint of history and religion such as Lumbini, Gosaikunda, Muktinath, Borahakshetra, Rara Lake etc. are not well developed are it lacks proper marketing as well.

Remedial Measures of the Problems of Tourism Industry

The following measures should be adopted to solve the problems of the tourism industry.

  1. Accessibility of Transportation and Communication: Transport and Communication facilities should be made easily accessible all over the tourist destinations of the country.

  2. Hotel Management and Tourism Training Facilities: Hotel management and tourism training centers should open their branches in tourist location to provide training facilities to persons related with tourism.

  3. Recreational Arrangement: The provision of adequate recreational arrangement should be made in each tourist destination throughout the country. Facilities such as rafting, gliding, shooting, ballooning etc can be managed for the same.

  4. Establishment of quality Hotels: Special attention should be paid to establish quality hotels in various parts of the country by involving the private sector.

  5. Arrangement of security: There should be a proper arrangement of security in tourist destinations. Similarly, political disturbances and instability should be managed.

Public Enterprises in Nepal


A public enterprise is an enterprise under government control. More than half of the total share of a public enterprise is owned by the state directly or indirectly. Such enterprises are effectively managed by the government. The main elements of public enterprises are:

  • It is an artificial person with legal status.
  • It is a business unit under good will control.

Objectives of Public Enterprises

In any economy, the purpose of establishing public enterprises has its own economic, political and social objectives. The objectives of establishing a public enterprise are:

  • To achieve economic development in the balanced and organized manner by providing basic infrastructures.
  • To distribute consumptions goods at a reasonable price by improving its quality.
  • To help generate national revenue.
  • To earn foreign exchange.
  • To generate the employment opportunities.

Importance of Public Enterprises in Nepal

The importance of public enterprises in Nepal are as follows:

  1. Planned Economic Development: Public enterprises helps to achieve the objective of planned economic development in accordance with the policies of the government. Generally, private sectors where there is no long gestation period and from where immediate maximum returns can be made possible.

  2. Balanced Development: Public enterprises help in achieving balanced development in a country. Balanced economic development requires a decentralization of industries.

  3. Accelerating the Rate of Economic Growth: Public enterprises aim at accelerating the rate of economic development by removing all the basic deficiency of the economy and providing all infrastructure facilities.

  4. Provision of Public Utilities: Private sectors are not very interested in providing public utility services due to the low rate of return and high capital investment. Through public enterprises government has to make provision for public utility services such as transport, communication, etc.

  5. Generating Employment Opportunities: Establishing public enterprises can generate more employment opportunities. People can get direct or indirect employment opportunities in the public enterprises.


Adhikari, Ramesh Prasad, Economics-XI, Asmita Pustak Prakashan, Kathmandu

Kanel, Navaraj, Principles of Economics-XI, Buddha Prakashan, Kathmandu

Kharel, Khom Raj, Economics In English Medium-XI, Sukunda Pustak Bhawan, Kathmandu

Things to remember

Roles of Tourism Industry

  1. Source of Foreign Exchange Earnings
  2. Employment opportunities
  3. Source of Public as well as private income
  4. Development of handicrafts Industries
  5. Cultural Exchange
  6. Development of Rural Infrastructures
  7. Publicity of Nation
  8. Development of human resources

Prospects of Tourisms Industry

  1. Nature Beauty
  2. Historical and Religious Places
  3. Ancient art and architecture
  4. Cultural Diversity
  5. Climate Diversity
  6. Rural Simplicity
  7. Less Expensive
  8. White Mountains

Problems of Tourism Industry

  1. Lack of Transportation and Communication facilities
  2. Lack of trained tourism manpower
  3. Inadequate information and publicity
  4. Lack of Recreational facilities
  5. Lack of Good Quality Hotels
  6. Problem of Pollution
  7. Insecurities
  8. Backward Tourism Sites

Importance of Public Enterprises in Nepal

  1. Planned Economic Development
  2. Balanced Development
  3. Accelerating the Rate of Economic Growth
  4. Provision of Public Utilities
  5. Generating Employment Opportunities
  • It includes every relationship which established among the people.
  • There can be more than one community in a society. Community smaller than society.
  • It is a network of social relationships which cannot see or touched.
  • common interests and common objectives are not necessary for society.

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